By Pranav Kashyap and Shristi Achar A
(Reuters) -European shares rose on Monday, rebounding from steep losses in the previous session, while investors assessed the implications of President Joe Biden’s exit from the U.S. presidential election race.
The pan-European STOXX 600 index gained 0.9% as of 0847 GMT, snapping its longest losing steak in nine months.
Most sectoral indexes were higher, with construction and materials up 1.3%. Belimo jumped 12.8% after the Swiss heating and ventilation solutions maker raised its sales forecast.
Investors assessed the impact of Biden abandoning his reelection bid on Sunday, while he endorsed U.S. Vice President Kamala Harris as his party’s candidate.
“A Trump-Vance ticket was potentially difficult for European equities given the America-first agenda,” said Richard Flax, chief investment officer at Moneyfarm.
“If there’s a marginal increase in the prospect of a Democratic victory, it would be a positive for European equities.”
Political uncertainties in the United States and prospects of U.S. trade restrictions caused a selloff in technology stocks last week and the benchmark index logged its biggest weekly decline of 2024. Lack of policy direction from the European Central Bank also added to investor concerns.
“Investors are perhaps taking stock and don’t necessarily want to make aggressive moves. However the outlook for a monetary policy is still a meaningful driver,” Flax added.
Among other stocks, Ryanair tanked 12.5% to the bottom of the STOXX 600 index, after the budget airline reported a 46% drop in quarterly profit and missed estimates. Peer Easyjet fell 6.5%.
Ryanair dragged the travel and leisure sub-index down 0.8%.
Varta plummeted 67% after the German battery maker said it’s discussing two restructuring scenarios that could potentially lead to Porsche taking a stake in it.
Rentokil Initial gained 10.8% after Sunday Times reported that former BT chief Philip Jansen is in talks to buy the British pest-control firm.
FinecoBank added 7.2% after Swiss insurer Zurich Insurance Group said it is studying a potential deal for the Italian online bank, daily Il Messaggero reported on Saturday.
The banking sector rose 1%.
(Reporting by Pranav Kashyap and Shristi Achar A in Bengaluru; Editing by Rashmi Aich and Shounak Dasgupta)
